Pharmacological agents are being developed to modulate phosphotyrosyl (pTyr)-dependent cell signalling. Emphasis is on inhibitors of pTyr- dependent binding interactions which are mediated by "src homology 2" (SH2) domains and on protein-tyrosine phosphatase (PTP) inhibitors. Central to both of these efforts is the development of new pTyr mimetics which afford either increased stability toward enzymatic degradation by PTPs or increased affinity. In the SH2 domain area, development of cell- permeable Grb2 antagonists is being undertaken as potential new breast cancer therapeutics. For this work, peptidomimetics have been designed as conformationally constrained analogues of natural Grb2 SH2 domain- bound pTyr-containing peptides. In conjunction, a series of new pTyr- mimicking amino acid analogues have also been prepared to enhance cell permeability. In the phosphatase area, new PTP inhibitors have been designed and synthesized based on the X-ray structure of our lead small molecule inhibitor bound to the PTP1B enzyme. Some of these new inhibitors exhibit greater than 14-fold increased potency relative to the parent compound. X-ray structures of new inhibitors bound to the PTP1B enzyme have been obtained, allowing a precise determination of enzyme-inhibitor interactions. Utilizing this information along with computer-assisted molecular modelling, a further series of inhibitors is being developed. Emphasis is on deriving bioavailable agents which are selective for specific target PTPs.